Why invest in the Scandies?

The Nordic currency markets provide an interesting alternative for global investors. Although the countries share history and a common ground for how society should be run, the currency arrangements are different.

Norway is outside of the EU with a fully floating currency, the economy is heavy reliant on the petroleum industry. The NOK trades correlated to the oil price although the arrangement with the sovereign wealth fund (“petroleum fund”) should make for a lower correlation as all oil revenues are invested abroad.

Sweden is a member of the EU and with a fully floating currency. The Swedish economy is a European dependent export-heavy economy with a traditional manufacturing base although the IT and Services industries are steadily taking over as the engine of growth. SEK used to be a very procyclical currency but the strong balance sheet speaks for a lower overall correlation to global growth. The fact that SEK was the best performing G10 currency in 2020 when global growth had the worst development since WWII proves this point with clarity.

Denmark is also a member of the EU but with a pegged currency to the EUR. Having a fixed rather than a floating currency has served the country well, especially so in the context of the global disinflation haunting central banks with an inflation target. In the past 10 years Denmark has succeeded in combining a stable currency with low inflation and a remaining and sizable Current account surplus. Liquidity is strong although periods of weaker turnover can be noted during holidays. In the triannual BIS survey Scandies are found just outside the top 10 most tradable currencies with an approx. 2% share each of the global FX market turnover of USD 6000bn/day.

Cross Scandies, NOK/SEK is a popular currency pair speculative trading as it is a relatively market neutral.

Navigating you through the Scandies

SEB FX at a glance

  • 24h market coverage
  • Leading Scandinavian bank within Electronic FX Solutions
  • First-ranked FX Research in Prospera ranking for 14 consecutive years 
  • Integrated to all main platforms and offer algo execution
  • FX sales and trading services in 13 locations globally
  • 24 hours seamless front to back-office functionality
  • First Scandinavian US swap dealer#1
  • Free access to the SEB research portal
  • Senior team with a highly valuable network among policy makers and industrial leaders

FX related research

You will find some of our FX research as well as our Nordic Outlook through the below links. These will give you a flavor of the reports and material you can access as a subscriber.

SEK view

NOK view

Currency strategy

Nordic Outlook

Research

Our first-ranked team of Economists and Strategists is the leading Macro & FICC research group in the Nordics. By following their work you will gain insights into Global and Nordic developments and getting first-hand information on financial, economic and political developments in the Nordics. 

Get access to the Scandi pool. Add our FX Algo to your trading mix

Have you considered algorithms to help you execute your large orders? With today’s requirements on best execution and transparency, trading with algos might be something to consider.

SEB offers algorithms on our own platform, Trading Station, and on a few external platforms.

An algorithm automates the execution of an order according to parameters that you set yourself before the start of the execution. You can choose different styles of algos and you will need to specify some parameters within which you want your order to be executed. You also can amend your parameters while the algo is underway and your order is being executed.

With an algo you will be able to execute your large orders while taking advantage of SEB unique internal Scandinavian liquidity pool. Not only will you have access to all the trading venues for those currency pairs but you will have the ability to match internally with the whole franchise of SEB clients. SEB franchise is made of a very wide variety of Nordic clients both Financial Institutions and corporates of all sizes. This pool of liquidity is unique and you can only access it via our own algos.

Note that an algo does not suit in every circumstance or for every client, if you want to discuss about algos and/or get additional information please contact your FX sales representative.

We help clients to take more control over their order execution. Hear from Carolina Trujillo about why SEB FX Algo might be a good addition in your trading mix.

Contact us

E-mail: fxmarkets@seb.se